| 10 Tips for Investing in Distressed or | | | | always obtain 3-4 bids from different |
| Foreclosed Properties | | | | contractors to estimate costs of repairs, if |
| | | | you do not plan on doing the work yourself. |
| 1. Search on the world wide web for | | | | |
| distressed or foreclosed properties as a | | | | 6. If you are going to sell the property |
| starting point. Use a professional REALTOR to | | | | after rehabilitating it, ask your REALTOR to |
| identify great foreclosure deals for you. You | | | | research similar properties in the |
| may be successful at searching the web on | | | | neighborhood to ascertain market price. |
| your own, but keep in mind some of the | | | | |
| information is outdated, some may be | | | | 7. Keep copious records for tax deductions. |
| incorrect, and some of the available | | | | Any expenses related to the purchase, repair, |
| properties are not even listed. A REALTOR | | | | or maintenance of the property may qualify. |
| subscribes to updated MLS listings and can | | | | Meticulous records are key to a profitable |
| offer you the most current information | | | | real estate venture. |
| available. | | | | |
| | | | 8. The title you receive after purchasing a |
| 2. If you search yourself for distressed | | | | distressed or foreclosed property is a |
| properties and purchase from the selling | | | | special warranty deed rather than a general |
| agent, you are paying a commission to someone | | | | warranty deed. Some buyers are alarmed by |
| with a vested interest. Obtain objectivity in | | | | this, but there is no need to worry. The |
| the sale by working with your own REALTOR. | | | | purchase of title insurance protects the |
| You won't pay any more. Technically, everyone | | | | buyer. Each lender purchases insurance to |
| works for the seller, since they pay the | | | | protect the loan as well. Titling insurance |
| commission. | | | | should be obtained by the property purchaser. |
| | | | It is always offered by the closing agent. |
| 3. With distressed or foreclosed properties, | | | | Consider using an attorney instead of a |
| time is of the essence. Purchasers must close | | | | titling company as your closing agent. An |
| on the date specified by the agency, and | | | | attorney is only $50-75 more than a titling |
| cannot close after this without penalties of | | | | company. A real estate attorney can remedy |
| $25-200 per day. | | | | any situation that may arise. Therefore, they |
| | | | are more efficient representatives on time |
| 4. It takes 1-3 weeks to qualify a loan. If | | | | sensitive foreclosure properties. |
| you are approved for a loan, make sure you | | | | |
| are qualified by your lender as soon as | | | | 9. Foreclosure properties require special |
| possible. If you are paying by cash, make | | | | addendums and special contracts by the |
| certain funds are available. If finances are | | | | individual bank and HUD office (where |
| in order, the REALTOR will then submit an | | | | applicable). |
| offer. When the offer is accepted by both | | | | |
| seller and buyer, the REALTOR will submit the | | | | 10. Foreclosure properties are potentially |
| ratified contract to the lender and closing | | | | the most profitable, but require the most |
| agent. These steps will begin the process of | | | | attention to detail. A REALTOR experienced in |
| a successful real estate transaction. | | | | foreclosure deals is highly desirable because |
| | | | the paperwork must be in order to submit a |
| 5. When purchasing a distressed property, | | | | proper bid, and timeliness is critical. |